Correlation Between Simple Mart and Inmax Holding

Can any of the company-specific risk be diversified away by investing in both Simple Mart and Inmax Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Simple Mart and Inmax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Simple Mart Retail and Inmax Holding Co, you can compare the effects of market volatilities on Simple Mart and Inmax Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Simple Mart with a short position of Inmax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simple Mart and Inmax Holding.

Diversification Opportunities for Simple Mart and Inmax Holding

0.07

Correlation Coefficient

Simple Mart  Inmax Holding

Significant diversification

The 3 months correlation between Simple and Inmax is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Simple Mart Retail and Inmax Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmax Holding and Simple Mart is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Simple Mart Retail are associated (or correlated) with Inmax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmax Holding has no effect on the direction of Simple Mart i.e., Simple Mart and Inmax Holding go up and down completely randomly.

Pair Corralation between Simple Mart and Inmax Holding

Assuming the 90 days trading horizon Simple Mart Retail is expected to generate 0.41 times more return on investment than Inmax Holding. However, Simple Mart Retail is 2.44 times less risky than Inmax Holding. It trades about -0.01 of its potential returns per unit of risk. Inmax Holding Co is currently generating about -0.07 per unit of risk. If you would invest  4,025  in Simple Mart Retail on December 23, 2024 and sell it today you would lose (30.00) from holding Simple Mart Retail or give up 0.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Simple Mart Retail  vs.  Inmax Holding Co

Simple Mart Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simple Mart Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Simple Mart is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Inmax Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inmax Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Simple Mart and Inmax Holding

The main advantage of trading using opposite Simple Mart and Inmax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simple Mart position performs unexpectedly, Inmax Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Inmax Holding will offset losses from the drop in Inmax Holding's long position.

The idea behind Simple Mart Retail and Inmax Holding Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.